Aboitiz Power drops acquisition in Vietnam

Published April 2, 2020, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2020/04/02/aboitiz-power-drops-acquisition-in-vietnam/

The international investment subsidiary of Aboitiz Power Corporation has abandoned its planned $46 million wind power acquisition in Vietnam due to snags in the completion of deliverables of the relevant parties as set on prescribed deadline dates.

The company stated in its disclosure to the Philippine Stock Exchange (PSE) that the plan of its subsidiary Aboitiz Power International Pte. Ltd to acquire 100-percent ownership in Mekong Wind Pte. Ltd. from Armstrong Southeast Asia Clean Energy Fund Pte. Ltd. (AAM) “was not completed due to condition precedent being unmet by the agreed long¬stop date.”

As a result of such drawback, Aboitiz Power International said it “decided to exercise its right to terminate the transaction.” It was not disclosed which part of the closing deliverables had not been satisfied.

Nevertheless, the Aboitiz firm stipulated that it is still “in discussions with AAM to revisit the acquisition at a future date.”

The company further noted “the termination of the transaction has no impact to Aboitiz Power’s existing operations and financial performance.”

The targeted 39.4-megawatt Dam Nai wind farm installation of Mekong Wind in Ninh Thuan province in Vietnam should have been the first offshore investment foray of Aboitiz Power, being part of its international expansion.

The share purchase agreement (SPA) was inked by the parties around August last year, but it was specified that there are closing conditions that needed to be complied with before the deal could be firmed up.

At that time, the company considered the proposed acquisition a “milestone transaction” because that had been eyed as its initial pathway into offshore market ventures into energy.

The Dam Nai wind facility is one of the renewable energy (RE) power projects in the Vietnamese market that had been successfully brought to commercial operations on the latter part of 2017.

Vietnam is considered an attractive market at this time for RE investments, as it has just entered a phase for its grant of feed-in-tariff (FIT) incentives for such type of technology for energy projects.

Apart from wind, Aboitiz Power has also been setting its sights on solar farm developments in Viet-nam, but it has not been specified until now which projects it has been targeting.